The fear factor of what will happen to North Dakota's economy is growing.
Jim Arthaud is a long time businessman from Belfield, ND and served as one of Governor Jack Dalrymple's campaign chairman in 2012.
Arthaud yesterday was featured on CNN predicting that the oil rig count in North Dakota would drop from the current level of 160 rigs, to 50 by June - and would result in a loss of 20,000 jobs.
Arthaud also told the Wall Street Journal in December: "If people aren’t worried, they are ignorant."
This is by far the most dire prediction of anyone in the oil business, but because of Arthaud's close relationship with Governor Dalrymple, it should not be dismissed immediately. Instead, we must wonder whether the prediction of the governor's closest associates in the oil business is playing a role in revising the governor's budget which is based on $75 dollar oil this year, and $85 oil the next two years.
Earlier in the session, the House Finance and Tax Committee heard testimony from Eugene Graner, a commodities expert from Bismarck explain that the current downturn has more to do with the long-term value of other currencies declining against the dollar than oil itself. Click here to read the transcript.
Graner told the committee, that expecting an average oil price beyond $60 over the next few years was "generous."
This is why the legislature is finally looking at what the various scenarios would mean. They created this chart to show just how wild things could get for state oil tax revenues (this does not factor the impacts on sales tax and income tax revenues).
It is yet to be seen what these statements will actually mean to the legislature, but when people in the oil business (who put lots of money into the campaigns of elected officials) start talking this way, it's a safe bet someone is listening.
And so should everybody else.
